The Tax Publishers2020 TaxPub(DT) 5516 (Mum-Trib)

INCOME TAX ACT, 1961

Section 68

Assessee had filed sufficient documentary evidences in the shape of account confirmation, bank statements, financial statements of lender, its Income-tax returns, etc., to establish identity of lender and his creditworthiness as well as genuineness of transaction. Also, assessee had paid interest on loan net of TDS. Accordingly, primary onus under section 68 stood discharged and, therefore, AO was not justified in taxing loan amount under section 68.

Income from undisclosed sources - Addition under section 68 - Receipt of unsecured loan - No response by lenders to summons issued under section 131(1)--Assessee proved identity, creditworthiness and genuineness

Assessee was found to have taken unsecured loans from certain party. AO issued summons under section 131(1) to lender, which remained unresponded, accordingly, AO treated loan amount as unexplained credit under section 68. Held: It was quite discernible that the loan was taken as early as in assessment year 2010-11, whereas inquiries being conducted by AO were as late as in 2019. Assessee had filed sufficient documentary evidences in the shape of account confirmation, bank statements, financial statements of lender, its Income tax returns, etc., to establish identity of lender and his creditworthiness as well as genuineness of transaction. Also, assessee had paid interest on loan net of TDS. Accordingly, primary onus under section 68 stood discharged and, therefore, AO was not justified in taxing loan amount under section 68.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :



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